Covid19 continued to dominate sentiment in October with greater lockdown measures seen in countries across the world putting further strain on the global economy.
Adding to the turmoil was the increasingly bitter US presidential race for the White House and monetary policy on hold until its conclusion. Investors were keen to see a commitment of an influx of money to the US economy from the Federal Reserve which would have seen a substantial positive effect around the world financial markets. In its absence, the bears were once again on top.
November has seen the US elections take place and while there may be further twists as we head towards the end of the year, there is hope of greater stability going forward. Added to that is the not so insignificant news of positive results for Pfizer’s Covid19 vaccine. Could we be in for a calmer end to the year for the financial markets perhaps?
The Armchair Trader’s October picks
We took a closer look at Bushveld Minerals [LON:BMN] at the end of September. We like the stock because of its role within the vanadium mining industry, a sector we expect will become more lucrative as demand for vanadium flow batteries mounts. Bushveld has recently become an even more aggressive vanadium play than previously, following its acquisition of Vanchem. The team here at The Armchair Trader feel that Bushveld Minerals looks undervalued and should pick up as industrial activity is stepped up. Shares were trading at 11.8p on 30th September when we added them to our watchlist.
Gold Resource Corp [NYSE American: GORO] last month announced its intent to spin off its Nevada assets to shareholders and create a new public company focussed solely on paying a material dividend from generated cash-flow. This new entity harks back to GORO’s roots where 30% of net cash-flow was paid as dividends to shareholders. We agree with managements assertion that far greater value can be created with two independent companies compared to the value that could be achieved by keeping the mining units together. Shares were trading at $3.03 on 5th October when we added them to our watchlist
Chinese car manufacturer NIO [NYSE:NIO] caught our eye in October when shares hit an all-time high crossing the $28 level in US trading. The stock is now up over 600% since the start of the year and it looks as if COVID has had little impact on its growth in value. NIO listed an ADR on the New York Stock Exchange in September 2018. At the time it looked like a risky venture stock, but since then it has managed to get its first electric car into sales rooms in China. The original model, the ES6, is a five seater SUV. It has now added a larger SUV and a coupe and is reportedly delivering 12,000 vehicles every quarter. Shares were trading at $27.9 on 20th October when we added them to our watchlist.
Over the course of October we saw Taat Lifestyle & Wellness [CSE:TAAT/OTC:TOBAF/FRA:2TP2] raise C$6.75m from Horizons Ventures and secure its first distribution deal while Nano One Materials Corp [TSX-V: NNO/ NDQ: NNOMF] announced a new capital raising phase using the proceeds to fund further research and development efforts. We also added Brigadier Gold [TSX Venture:BRG / Frankfurt: B7LM / OTC:BGADF] to our watchlist on 30th October on news of the commencement of exploration at a key gold and silver site in Mexico’s Viva Zapata with results due very soon.
Here’s how our picks are performing
|Company/Instrument||Start price||Current price*||Percentage change|
|Taat Lifestyle & Wellness||1.26||1.85||+46.8%|
|Gold Resource Corp||3.32||2.74||-17.5%|
*Prices as of close of play on 30th October 2020
Removed from The Armchair Trader’s current watchlist for next month: 7digital Reason: volatility -40%, We feel this remains an interesting stock in the medium term and continue to monitor.
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